so how do you practice trading risk-free
in this video I'm going to go over some
of the pros and cons of paper trading
and how to use the thinkorswim platform
to paper trade
hey how's it going
on this channel you will learn the steps
I took to go from trading with a
full-time job
to trading as a full-time job though if
you're new here consider subscribing and
today we're looking at paper trading in
the thinkorswim platform the best part
about paper trading or trading with fake
simulated money is that it's risk free
you don't have to put any of your money
on the line to test out or learn how to
trade in the stock market because that's
a big fear or maybe setback for a lot of
people is that oh to start trading or to
learn I have to put my money on the line
but that's actually not true you can use
paper trading to get that stress and the
risk out of there because you'll have to
put your money on the line that creates
a less or stress free environment so you
can really just dive into learning how
to trade instead of having to deal with
all the emotional swings of either
making or losing money that comes with
trading another awesome thing about be
able to pay per trade is that it allows
you to learn the platform you don't want
to accidentally have money on the line
in a trade and accidentally hit the
wrong button that could lose you
potentially thousands of dollars being
able to practice everything in a
stress-free and risk-free environment
while you're just learning the platform
is really important while you're
learning the platform this also allows
you to practice a trading strategy and
hone in your trading strategy a big
important thing about trading in the
stock market is creating a strategy and
then seeing where that strategy works
and doesn't work one of the best ways to
do that without having to risk your
money is doing that paper trading and
doing that paper trading also build your
confidence in the trading strategy
because you are able to see that you are
able to be profitable with that trading
strategy while trading it in almost real
time conditions working out a strategy
based on just past performance doesn't
really work the only way to really test
this strategy is to test it forwards and
test it either in real time with a paper
trading account or putting your money on
the line with a real account the
smartest way to do that is using a paper
trading account so you don't have to
risk your money on maybe a strategy that
isn't going to be profitable a big thing
to keep in mind though is that paper
trading definitely does not equal real
money trading because you don't have all
the stress of risk and your own money on
the line it will not simulate exactly
what it will be like it's a lot easier
to follow your trading strategy in a
simulation because you don't have that
money to affect you emotionally it's
easy to say that oh it won't affect me
but emotions in the stock market play a
huge role and never downplay the fact
that emotion is going to affect you
because the swings of our own money
affect our emotions greatly and that
will cause us to maybe sway from our
trading plan and affect our returns in
the end which may be the paper trading
wouldn't have had happen with the fact
that it is paper trading it can be
easiest to not take it serious because
it is just play money and you can really
mess around playing with a huge sum of
money that they usually give you but you
need to take it seriously because you
are going to be using this potential
strategy that you're testing with your
own money in the end and you're not
going to be wanting to mess around then
knowing that your strategy is profitable
based on you being as serious as you can
and trying to make the simulation as
real as possible to develop real results
and a real strategy so when you switch
from paper trading to real money it's
not a huge difference in how you're
trading it's just the fact that you're
actually using real money if you traded
way differently then you're gonna trade
when trading your real money you're
gonna have much different results and
most likely there will be results that
you're not gonna want so first off how
to get into thinkorswim - paper trade
you need to first sign up for
thinkorswim
and once you have an account with them
when you are logging in you really make
sure to change this live trading in the
paper trading and then that will log you
into the simulation instead of the main
platform when you log in now that we're
in the actual account the first thing
you'll notice at the top left is you
actually have money and generally you
will start with a hundred thousand and
it'll show that you have two hundred
thousand in buying power because you
have a margin account another important
thing is up at the left you will see
that you have delayed data and right now
for me it says you have I have 20
minutes of delayed data but you should
be able to call their client services
and ask them to make your data not
delayed so you can trade with the real
time of the stock market you try and
make it as close to a real simulation as
possible that actually trade there are
many ways to open just a I share order
on this platform but easy way I like to
do is just go to charts and then if I
have this chart open of Apple and I
wanted to buy a hundred shares of Apple
at the price 215 I can just right click
and click buy and that will open up this
order down here of defaulted to a
hundred shares of Apple at the limit
price of 215 because that's what I had
clicked up here and then to make that
I'll have to do is send and that'll
create that order and as you can see
because the price of Apple is above 215
it's out and right now it's at 215 and a
half about I won't get filled on that
because this is a limit order to get
filled at when the price is exactly 215
so the price of Apple has to come down
to 215 for me to get filled on those
shares if I wanted to adjust this order
quickly to maybe get filled right now at
Apple all I have to do is click and drag
this limit a hundred that came up and
get it to about the exact price that
Apple is trading at and then if I click
that it'll create this new buy order at
that new price and I can
like send and that will delete the old
one and create a new one as you can see
I got filled up here it says I cancelled
and then got filled on my new order of a
hundred shares of Apple and to look at
that order now I just have to go to the
monitor tab and I have these other
random positions that I was messing
around with earlier but you can see
right here I have a quality of a hundred
shares of Apple it says what price I got
in it and then it says how much I am up
so I'm up already a quarter of a percent
on that which is $26 you will be able to
monitor this and see as the price goes
up and down if I wanted to close this
position I can just right click and
create sell order and that'll bring up
the trade tab and down here it will say
that I'm selling a hundred shares of
Apple and then I can click confirm and
send and that will send in that sell
order now I can go back here and I can
see that that order is working to sell a
hundred shares of Apple it might not get
filled right away just based on the
market conditions and maybe the price
moved away from the sell price that I
want so maybe I want to sell at two
fifteen and a half but now the prices
moved down to two fifteen I won't be
able to sell at two fifteen and a half
because that's 50 Cent's above the
market and no one's gonna want to buy
above the current market value of that
stock now if you're wanting to trade
options you can go into the trade tab
and it'll have the options grid now to
just buy a basic call option you will
have the calls on the left side here and
you can see that here down here in the
darker background and the black
background is the out of the money
options and then right here you will
have at the money options because the
price over here is to about 215 and the
current price of Apple is 215 and then
beyond that you will have in the money
options that are more in the 200 price
range and below the actual price of the
current value so just to buy a basic at
the money option I can just right click
here and click buy single and that will
come up with a
by order here to default at buying 10
call options and I can see that down
here the current price is at 155 it just
moved up a sense and I can click confirm
and send and then I'll bring up another
tab and it'll show you how much that is
currently charging me because I'm buying
ten of these and it's times a hundred of
that current price there so it's $150
per each call option and then times ten
because I'm buying ten of them it's
gonna cost me fifteen hundred dollars to
buy ten of these it'll give me control
over a thousand shares of Apple or just
fifteen hundred instead of having to pay
two hundred thousand dollars so I can
just click confirm and send for that and
you can see up here it makes that little
ding and then I got filled on 10 call
options of Apple you can see down here
because I'm looking at Apple it'll have
my positions on Apple soakin so you can
see that I have a hundred shares of
Apple down here and then ten all options
of Apple as well and it will have all
the Greeks of those options and it will
also tell you how much money you're up
and down or those positions you have if
I wanted to sell this I can just right
click and create closing order to do
that and to make more complicated
strategies I can right click on here and
click buy or sell and you can see that
it comes up with a ton of different
strategies to use for options even
though it is fun to trade with a huge
size because you're given this huge
account I would suggest that you trade
using the size of account you're gonna
use if you're gonna just start out with
a few thousand dollars try and trade
around those parameters because it'll
make it as fluid transition when you go
from paper trading to real money trading
hey thanks for checking out this video
if you want to learn more about trading
in the stock market or the thinkorswim
platform make sure to subscribe to the
channel if you like this video give it a
thumbs up and as always if you have any
comments or questions ask them in the
comments below